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December 2017

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As the prices of crude oil plunged below US $50 mark, its effects are apparent in the downstream products like Polyester. The sector, in order to remain in competition, has decided to reduce the yarn prices by almost 20 percent.

Mr Devkishan Manghani, General Secretary of Federation of Surat Textile Traders Association (FOSTTA) told Fibre2fashion, “As cost of crude oil plummeted, price of polyester yarn also plunged. Till now there has been 5 to 10 percent reduction in polyester yarn and further 5 to 10 percent fall is expected by January 2009.”

As against a price of Rs120-130 kg, polyester yarn has gone down to Rs80-90 per kg and is expected to fall further. It is expected that the effect of fall in prices of yarn is likely to be seen in other products in the polyester value chain like grey cloth and fabric.

In total, textile manufacturers produce around 30 million meter polyester fabric per day. Experts anticipate, with decline in prices by 20 percent, impact will be gigantic.

“We will be facing losses on our finished good as new yarn is available at cheaper rate. Presently we have reduced our production by 20 percent. Already we are facing a slack period that will continue till mid January. That means we will be able to sell our products after January", says General Secretary, FOSTTA.

“Other than polyester yarn, we are producing fabrics from nylon and viscose yarn. However only 10 percent of these yarns are used in our fabrics and their prices of are not much affected, we can manage our profit margins in this category. Any ways, we are losing battle in front of polyester yarn prices”, concludes Mr Devkishan Manghani.